Laura Brown: Self-employed financial support: COVID-19
Laura Brown, an advisor at Murray Beith Murray, a Scottish private client law firm, details the financial support made available to those who are self-employed, as part of the UK Government’s coronavirus economic support measures.
On Thursday, Chancellor Rishi Sunak announced further measures to support self-employed taxpayers whose trading profits are less than £50,000 and whose main source of income (at least 50%) is derived from self-employment.
The scheme will be known as the Coronavirus Self-employment Income Support Scheme, and is open to those who were trading in the last financial year, still trading now, and planning to continue doing so this year.
Those who are recently self-employed and do not have a full year of accounts will not receive any help under this scheme.
You cannot, at the moment, apply for this scheme. HM Revenue & Customs (HMRC) will contact you if you are eligible for the scheme and invite you to apply online where you will access this scheme only through GOV.UK.
HMRC has warned that if someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
If you are eligible, you will receive a taxable grant which will be 80% of your average profits from the tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
The taxable grant will be up to a maximum of £2,500 per month for three months which will be paid directly into your bank account in one instalment. Payments will commence from the beginning of June. As the grant constitutes income, you are required to include this income if you make a claim for tax credits.
If you have not submitted your Self-Assessment Tax Return for the tax year 2018-19, you must do this by 23 April 2020.
The Government is also providing the following additional help for the self-employed:
- Deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
- Grants for businesses that pay little or no business rates
- Increased amounts of Universal Credit
- Business Interruption Loan Scheme
Read all of our articles relating to COVID-19 here.